CANADA STOCKS-TSX falls on global growth fears

Mon Jul 9, 2012 5:08pm EDT
 
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* TSX ends down 25.29 pts, or 0.2 pct, at 11,634.67
    * Index touches lowest level since June 29
    * Mining, energy shares lead losses
    * U.S., China growth fears hurt risk assets
    * Markets await Alcoa results after the close

    By Jon Cook
    TORONTO, July 9 (Reuters) - Canada's main stock index fell
on Monday, led by mining and energy shares, on doubts a meeting
of euro zone ministers would accomplish much and after weak
Chinese data stoked fears about global growth.
    The Toronto Stock Exchange's S&P/TSX composite index
 touched a July low during the session.
    Weaker-than-expected Chinese inflation data, combined with a
soft U.S. jobs report on Friday, raised concerns the global
economy is hitting a soft patch. 
    While markets slid, however, commodity prices rose on
expectations that Beijing would act to avoid a hard landing of
the world's second-largest economy. Still, investors were
cautious before a report due later in the week on China's gross
domestic product, which is likely to show the weakest expansion
in three years. 
    "There's a bit of a divergence that's under way," said
Michael Gayed, chief investment strategist at Pension Partners
LLC in New York. "That may be because of this feeling that what
seems to be the aggressive policy steps that China is taking may
start to cause a pick-up in demand for commodities."
    Most of Canada's 10 main sectors were in the red on Monday.
Leading the way were the materials and energy groups, which both
fell 0.6 percent.
    Teck Resources was the biggest single drag,
tumbling 2.6 percent to C$31.08 after the copper miner said on
Monday it has temporarily withdrawn the environmental assessment
application for its expansion at the Quebrada Blanca mine in
Chile. 
    Other resource companies which fell included top gold
producer Barrick Gold, which slid 0.5 percent to
C$37.36, First Quantum Minerals, down 2.8 percent at
C$18.11, Suncor Energy, off 0.7 percent to C$29.16, and
Canadian Natural Resources, which sank 1 percent to
C$26.32.
    The Toronto Stock Exchange's S&P/TSX composite index 
finished down 25.29 points, or 0.2 percent, at 11,634.67. At one
point it touched 11,565.04, its lowest since June 29.
    Doubts that a meeting of euro zone finance chiefs will
result in much progress further dented sentiment, while yields
on benchmark Spanish and Italian bonds were moving up to levels
considered unsustainable. 
    However, the losses were limited as the data was also seen
boosting the prospects for stimulus from the world's major
central banks. 
    "That's the sign of a bear market," said John Ing, president
of Maison Placements Canada. "The market is forever looking for
the hope of a QE3, but the reality is that quantitative easing
only buys time." 
    Three top U.S. Federal Reserve policymakers on Monday laid
the groundwork for a third round of bond purchases, or
quantitative easing, to prop up the struggling economy.
 
    With uncertainty high, investors bought up safe-haven
telecommunications stocks, which edged up 0.2 percent. Telus
Corp shares rose 0.7 percent to C$63.07, while BCE Inc
 climbed 0.4 percent to C$42.56. 
    Markets were also subdued ahead of the start of the U.S.
earnings season. 
    With North American stocks being broadly oversold, Gayed
said it could spark a turnaround.
    "You could have a situation where the bad news and bad
earnings and bad demand everyone is expecting ends up being seen
as a reason to own risk assets," he added. "If everyone already
assumes that it's negative then you start betting on the
opposite."